Treasury Wine Estates unveils recovery plan as shares surge
Australia’s largest wine group has announced a major restructuring plan that boosted its share price by 17% in a single day. The strategy aims to improve performance, reduce debt pressures and drive growth across key global markets.
Australia’s biggest wine group, Treasury Wine Estates, has launched a recovery plan that sent its shares up by 17%, their biggest one-day leap in more than five years. However, they remain almost 75% below their pre-Covid record.
The plan, which will reorganise the company into four regional operations, also includes a rescheduling of AU$300m of debts.
This will “drive clearer accountability for performance and enable faster, more market-connected decision making as a foundation for consistent depletions growth”, said chief executive Sam Fischer, who took over in the hot seat in October.
Shift to regional operating model
From October 1, Treasury will cease operating by brand group and become four geographical divisions: the Americas; ANZ & Europe; Greater China; and Emerging Markets, covering the rest of Asia, the Middle East, and Africa.
They will each handle their entire product range as appropriate to their markets.
Addressing debt concerns and investor criticism
The new finance facilities will allay recent speculation that high debts could force Treasury under while the reorganisation meets much of the criticism launched at the present board by big shareholder and former chief operating officer Robert Foye.
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Treasury has also reported strong demand for its products from distributors to retailers in key markets in the third quarter, underpinned by strong demand for its flagship Penfolds brand in China, Australia, New Zealand and the rest of Asia.
Penfolds’ sales through distributors in China rose 40% in the three months to the end of February versus the three months to the end of January 2025, boosted by strong demand for the Chinese New Year.
Penfolds’ depletions also rose by 11% in Australia, New Zealand and by 14% in Asia excluding China on a seasonally adjusted basis.
Growth returns in the Americas
Treasury Americas’ sales grew 9.1% and moved into growth in the crucial Californian market, where Treasury has spent more than A$1.8 billion in recent years to buy Frank Family Vineyards and Daou to add to Beringer and Sterling Vineyards.
Earlier write-downs and outlook
At Christmas, Fischer cancelled the dividend and wrote off the entire AU$649m goodwill of the US enterprise.
Along with the revised structure, Treasury underlined its forecast that operating earnings in the second half of its financial year will show a continuing improving trend.
It also said it does not expect to incur higher costs as a result of the Middle East conflict.
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